lrv environmental, inc., a.s.b.c.a. (2015)

7/25/2019 LRV Environmental, Inc., A.S.B.C.A. (2015)

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ARMED SERVICES BOARD OF CONTRACT APPEALS

Appeals

of

-- )

LRV Environmental, Inc. )

Under Contract No. DACWl 7-02-C-0028 )

APPEARANCE FOR THE APPELLANT:

APPEARANCES FOR THE GOVERNMENT:

ASBCA Nos. 58727, 58728

Jeff H Eckland, Esq.

Eckland & Blando, LLP

Minneapolis, MN

Thomas H. Gourlay, Jr., Esq.

Engineer Chief Trial Attorney

Carolyn J. Fox, Esq.

Assistant District Counsel

U.S. Army Engineer District,

Jacksonville

OPINION

BY

ADMINISTRATIVE JUDGE HARTMAN ON THE GOVERNMENT'S

MOTION TO DISMISS FOR LACK OF JURISDICTION AND THE PARTIES'

CROSS-MOTIONS FOR SUMMARY JUDGMENT

The government moves to dismiss these appeals for lack of urisdiction on the

grounds that they are barred by the six-year statute

of

limitations set forth in the Contract

Disputes Act,

41

U.S.C.

7103(a)(4)(A), and the requirement an appeal from a

contracting officer's

(CO s)

final decision to this Board be made within 90 days

of

the

receipt of the CO s decision. Appellant asserts it submitted its claims within six years of

accrual and thus

is

not barred from pursuing them, and that the earlier decision of the CO

was not final because it was reconsidered by the CO and thus not required to be appealed

within 90 days of appellant's receipt of the earlier decision. The government

alternatively moves for summary judgment on the ground the parties' contract provides

that contract line item numbers (CLINs) with unit pricing will be paid based upon actual

quantities. Appellant cross-moves for summary judgment arguing the parties'

fixed-price contract provides for payment

of

the unit price for the estimated quantities

when the actual quantity is within

15

percent of the estimated quantity.

STATEMENT OF FACTS

FOR

PURPOSES OF THE MOTIONS

In September of 2002, the Jacksonville District of the United States Army Corps

of

Engineers (Corps) awarded a contract, No.

DACWl

7-02-C-0028,

in

an amount


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exceeding $1.5 million to appellant LRV Environmental, Inc. (LRV) to perform work at

San Juan Harbor, La Esperanza Peninsula, Catafio, Puerto Rico, described as follows:

The project modifications will include the dredging of a flow

channel through the peninsula and the removal, by dredging,

of

the tip

of

the peninsula. The required dredging depth will

be

3

feet N.G.V.D and the total quantity

of

material to be

dredged will be approximately 51,000 cubic yards. All

dredged material will be placed in a cove located along the

interior shoreline

of the peninsula. The required final

elevation of the material placed in the cove will be between

0.0 feet N.G.V.D. and 1.0 feet N.G.V.D. with a 0.5 foot

allowable tolerance below the required elevation. Also

required will be the installation

of

approximately 500 linear

feet.

..

of steel sheet pile to stabilize the shoreline of the

peninsula.

(R4, tab 4 at 39-41, 474) The contract divided work to be performed into six CLINs,

three

of

which (mobilization and demobilization, endangered species monitoring, and

turbidity monitoring) were LUMP SUM PAYMENT ITEMS and threeofwhich

(clearing and grubbing (CLIN 2), excavation and placement (CLIN 3), and sheet pile

(CLIN 6)) were UNIT PRICE PAYMENT ITEMS (UPPI) (R4, tab 4 at 390-93).

With respect to CLIN 3, excavation and placement, LRV offered a firm-fixed un t

price based upon an ESTIMATED QUANTITY of 51,000 cubic yards (R4, tab 4

at 216). Pursuant to contract 01270, 1.2.1.1, 1.2.1.2, and 1.2.1.3, LRV was to be

paid its firm-fixed unit price for CLIN 3 for actual quantities required to complete that

work. The contract explained that monthly partial payments will be based on

approximate quantities determined by soundings or sweepings performed by the

Contractor behind the dredge. (R4, tab 4 at 391-92)

t

further explained:

The total amount ofmaterial removed, and to be paid for

under the contract, will be measured by the cubic yard in

place and be determined by the average end area method. The

volume computed shall be between the bottom surface shown

by soundings taken within 3 weeks before dredging and the

bottom surface shown by the soundings taken within 3 weeks

after the work specified in each acceptance section indicated

on the drawings has been completed. [LRV] shall give

3 weeks advance notice, in writing, to the Contracting

Officer's Representative of the need for a pre-dredging

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survey or after-dredging survey for final acceptance for each

acceptance section.

Id.) Contract 02325, DREDGING,

if il

3.4.1, 3.4.2, 3.4.3, reiterated several times

that [t]he material actually removed from the designated areas to be dredged will be

estimated and paid for in accordance with the provisions contained in ...Section 01270

(R4, tab 4 at 526, 534-35).

With respect to CLIN 6, Steel Sheet Piling, LRV offered a firm-fixed

un t

price

based upon an ESTIMATED QUANTITY

of24 200

square feet (R4, tab 4 at 216).

Pursuant to contract 01270,

if il

1.2.3.1, 1.2.3.2, and 1.2.3.3, LRV was to be paid its

firm-fixed unit price for CLIN 6 for actual quantities required to complete that work, i.e.,

the number

of

square feet

of

installed and painted sheet pile used in the accepted work

(R4, tab 4 at 393).

The parties' contract contained various standard clauses set forth in the Federal

Acquisition Regulation (FAR), including

FAR

52.211-18,

v

ARIA

TION N

ESTIMATED

QUANTITY APR

1984 );

FAR

52.232-5,

PAYMENTS UNDER

FIXED-PRICE

CONSTRUCTION

CONTRACTS

MAY 1997); FAR 52.236-16,

QUANTITY

SURVEYS APR 1984), and FAR

52.243-4,

CHANGES AUG

1987). The first

of

these clauses, Variation in Estimated

Quantity (VEQ),

FAR

52.211-18, states in relevant part:

f

he quantity

of

a unit-priced item in this contract

is

an

estimated quantity and the actual quantity

of

the unit-priced

item varies more than

15

percent above or below the

estimated quantity, an equitable adjustment in the contract

price shall be made upon demand

of

either party. The

equitable adjustment shall be based upon any increase or

decrease in costs due solely to the variation above

115 percent or below 85 percent

of

the estimated quantity.

(R4, tab 4 at 57, 94, 113, 116) The second

of

these clauses, Payments under Fixed-Price

Construction Contracts (Payment),

FAR

52.232-5, states in relevant part:

(a) Payment

of

price. The Government shall pay the

Contractor the contract price as provided in this contract.

(b) Progress payments. The Government shall make progress

payments monthly as the work proceeds, or at more frequent

intervals as determined by the Contracting Officer [CO], on

estimates

of

work accomplished which meets the standards

of

quality established under the contract, as approved by the

[CO].


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(h) Final payment. The Government shall pay the amount

due the Contractor under this contract

after

(1)

Completion and acceptance

of

all work;

(2) Presentation

of

a properly executed voucher; and

(3) Presentation

of

release of all claims against the

Government arising by virtue

of

this contract, other than

claims, in stated amounts, that the Contractor has specifically

excepted from the operation

of

the release.

(R4, tab 4 at 94-96) The third

of

these clauses, Quantity Surveys, FAR 52.236-16, states

in relevant part:

(a) Quantity surveys shall be conducted, and the data derived

from these surveys shall be used in computing the quantities

ofwork performed and the actual construction completed and

in place.

(b) The Government shall conduct the original and final

surveys and make the computations based on them. The

Contractor shall conduct the surveys for any periods for

which progress payments are requested and shall make the

computations based on these surveys. All surveys conducted

by the Contractor shall be conducted under the direction

of

a

representative of the [CO], unless the [CO] waives this

requirement in a specific instance.

(c) Promptly upon completing a survey, the Contractor shall

furnish the originals

of

all field notes and all other records

relating to the survey or to the layout

of

the work to the [CO],

who shall use them as necessary to determine the amount

of

progress payments. The Contractor shall retain copies

of

all

such material furnished to the [CO].

(R4, tab 4 at 113-14) The last

of

these clauses,

FAR

52.243-4, Changes, states in

relevant part that the CO may, at any time, without notice to the sureties,

if

any, by

written order designated or indicated to be a change order, make changes in the work

within the general scope

of

the contract (R4, tab 4 at 116).


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By letter dated

25

July 2005, the Corps acknowledged completion by LRV

of

all

required contract works for subject project, and notified LRV that, since the variation

on all quantities covered

..

fall within the 15 percent allowed by the VEQ clause, no

adjustment would be made in the unit prices bid by LRV. The Corps requested,

however, that LRV execute a proposed bilateral contract modification: adjusting

estimated quantity set forth in the contract for excavation and placement ( 51,000 cubic

yards) to reflect the underrun quantity actually performed, which it stated was

42,842.5 cubic yards; proportionately adjusting the total contract sums for two lump sum

CLINs (turbidity and endangered species monitoring); and stating that [t]his

modification .. will be used to determine final payment under the contract. (R4, tab 5

at 675-76, 680-81) LRV did not execute the proposed contract modification see R4,

tab 1 at 2, tab 5 at 672, 680-81 .

On 25 May 2007, LRV submitted to the CO a certified claim seeking

$5,477,918.88 due to inappropriate total volume dredge determination, contract price

adjustment, and the consequences that resulted from such action (R4, tab 5 at 672-73).

LRV stated that a price adjustment was implemented [on progress] Payment Estimate

Number #15 pursuant to the draft modification that never was officially completed,

the quantity for CLIN 3 (excavation) was changed to 42,842.50 Cubic Yards and the

prices for two lump sum items, CLINs 4 and 5 (endangered species and turbidity

monitoring), decreased proportionately, resulting in a contract price reduction

of

$100,769.11. LRV added one of its subcontractors had claimed payment for excavation

of

51,000 cubic yards and prevailed in a suit filed against its Payment and Performance

Bond Company, it was now unable to obtain payment and performance bonds, and as a

direct result it had suffered economic and business development problems. (R4, tab 5

at 672-73)

In October 2007, the Corps' CO issued a final decision on LRV's claim (R4, tab 5

at 724-29). The CO concluded a credit of $81,575.00 against CLIN 3 based upon an

actual quantity performed

of

42,842.5 cubic yards ''was appropriate and in accordance

with the VEQ clause. The CO concluded further that the Corps was not responsible for

expenses incurred by LRV relating to the Miller Act lawsuit

of

its subcontractor and that

other damages sought by LRV were for acts sounding in tort, not contract, and thus

beyond her authority to pay. The CO, however, did conclude that the Corps'

proportionate reduction

of

lump sum amounts for turbidity and endangered species

monitoring were in error because the VEQ clause applies only to unit-priced items.

The CO therefore acknowledged the lump sum items should remain as bid and LRV

was entitled to payment for the full amount ofth[o]se line items. (R4, tab 5 at 727-28)

On 18 January 2008, LRV filed a notice

of

appeal

of

the CO s decision with this

Board (R4, tab 5 at 736-43). The appeal was docketed as ASBCA No. 56303

id.

at 731-32). Less than one month after submitting its notice

of

appeal, LRV advised it

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was withdrawing its notice id. at 744) and the Board dismissed its appeal as

withdrawn.

By contract Modification No. P00019 dated

13

February 2009, the Corps' CO

unilaterally modified the parties' contract adjusting estimated quantities set forth for

both steel sheet piling and for excavation and placement to reflect the underrun quantities

it believed LRV actually performed, which were stated to be 23,683.89 square feet and

42,842.5 cubic yards, respectively. Based upon the unit prices bid by LRV, this resulted

in a decrease in the total price ofCLINs 6 and 3 of$17,083.27 and $81,575.00,

respectively, for a total reduction in contract price of $98,658.27. (R4, tab 1 at 2-3;

compl.

ii 12,

answer

ii

12)

By email dated 2 July 2010, the Corps notified LRV that, in reviewing the contract

for close out, it discovered a calculation error in the quantity of excavation actually

performed for CLIN 3. It stated that a quantity of 4,638.5 [cubic yards] was

inadvertently omitted in the total calculation. It added that, while the total amount

dredged was stated previously (in the CO s decision and contract amendments)

as

42,842.5, [t]he total amount dredged should be 47,481 [cubic yards]. The Corps thus

proposed the parties' execution of a contract modification reflecting a variation in

Estimated Quantities in the amount

of

4638.5 [cubic yards,] which increases the contract

price by $46,385.00. (Gov't mot., attach.

1

LRV did not execute the Corp's proposed

contract modification, which LRV asserts also contained a release of claims (compl. ii 15;

gov't mot. at 3-4).

By letter dated 31March2012, LRV submitted to the CO a certified claim

in

the

amount

of

$98,658.27. LRV alleged the Corps wrongfully applied the VEQ clause to

CLIN 3 (excavation and placement) and CLIN 6 (steel sheet piles) to reduce quantities

set forth by $81,575.00 (8,157.50 cubic yards x $10.00) and by $17,083.27 (516 square

feet x $33.10), respectively. According to LRV, the Corps deducted the difference

between ctu l qu ntities performed and the quantity amounts initially set forth

in

the

contract from the latter amount to incorrectly set forth new quantity amounts to be used

with unit pricing to determine payment, i.e., LRV should have been paid for the full

contract amount initially set forth at the unit price rather than the unit price multiplied by

ctu l mounts

for CLINs 3 and 6. (R4, tab 3 at 1-3)

On 20 March 2013, the CO issued a final decision (received by LRV on that same

day) granting LRV $46,385.00 (plus interest accrued) for 4,638.5 additional cubic yards

of excavated material under CLIN 3. The CO denied the remainder of the claim. (R4,

tab 1 at 1-4) In addressing LRV' s March 2012 claim, the CO made no mention of LRV' s

May 2007 claim which was the subject of a decision issued in October 2007 (R4, tab 1 .

On 17 June 2013, LRV timely sought review by this Board of the CO s March 2013 final

decision (R4, tab 2 at 9). Its appeals were docketed

as

ASBCA Nos. 58727 ($17,083.27

claim under CLIN 6) and 58728 ($81,575.00 claim under CLIN 3) (R4, tab 2 at 5 .


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On 4 September 2013, the Corps paid LRV $40,880.77 for the 4,638.5 cubic yards

previously omitted in quantity performed calculation for CLIN 3 (gov't mot., attach. 2).

According to the Corps, the payment represents the unit price bid by LRV ($10.00)

multiplied by 4,638.5, plus interest, minus an amount required to be withheld

as

a lien by

the IRS.

DECISION

I Motion to Dismiss

The Corps moves to dismiss LRV s appeals for lack of urisdiction as barred

by

the six-year statute of limitations set forth in the Contract Disputes Act,

41

U.S.C.

7103(a)(4)(A). According to the Corps, LRV knew or should have known of the

Corps' interpretation of the parties' contract that payment was to be based on actual

quantities performed on

25

July 2005 when the Corps requested LRV execute a bilateral

contract modification adjusting the quantity set forth in CLIN 3 for excavation and

placement to reflect the quantity LRV actually performed, but LRV did not submit its

claims until

31

March 2012, over six years and eight months later. (Gov't mot. at 10-12)

LRV opposes the Corps' motion to dismiss on the ground that a claim does not

accrue (and the six-year statute

of

limitations begin running) until

(1)

the date when all

events that fix liability were known or should have been known by a claimant and

(2) some injury has occurred. According to LRV, the Corps' interpretation

of

the

contract as requiring payment based on the CLIN quantity actually performed by LRV

was not actually applied by the Corps (fixing liability and permitting assertion

of

a claim)

until a date within six years of the assertion of its claims here, allowing pursuit of its

claims. (App. opp n at 4-7)

On 10 December 2014, after the parties had completed their briefing of the Corps'

motion to dismiss for lack

of

urisdiction, the United States Court

of

Appeals for the

Federal Circuit issued its decision in Sikorsky Aircraft Corp. v United States 773 F.3d

1313 (Fed. Cir. 2014), stating that, while its precedent previously characterized the

six-year statute

of

limitations in the CDA as jurisdictional, the Supreme Court 's recent

decision in Sebelius

v

Auburn Regional Medical Center 133 S Ct. 817 (2013),

effectively had overruled that precedent. The Federal Circuit held that, under the

Supreme Court 's bright-line test set forth in Auburn Regional the six-year deadline set

forth in the CDA was a claim processing rule coming within the general rule that filing

deadlines are not jurisdictional. Sikorsky Aircraft 773 F.3d at 1320-22. We, therefore,

deny the Corps' motion to dismiss these appeals for lack of

urisdiction based upon the

CDA s six-year filing deadline.

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The Corps also contends that, [s]ince the alleged misapplicationof the VEQ

clause for adjustment

of

CLIN 0003 was the subject

of

a previous [CO's] Final Decision,

LRV

is precluded from raising it again in a second claim. According to the Corps, a

final

CO s

decision

was

issued

on 11

October 2007 stating that the Corps appropriately

applied the VEQ clause, an appeal must be made from such a final decision to the Board

within 90 days

of

receipt, the appeal made was withdrawn

by LRV

within 30 days

of

filing, and LRV therefore is barred from appealing the CO s 2007 decision six years later

and obtaining another bite at the apple. (Gov t mot. at 12-13)

In its complaint in these appeals, LRV alleges it maintained that the [Corps]

remained liable for the full fixed price

of

the [parties'] Contract (i) for [CLIN] 0006 for

Steel Piling .including the $17,083.27 that the [Corps] purported to deduct from the

fixed price

of

the Contract for said item by the [2009 unilateral contract] Modification,

and (ii) for CLIN 0003 for Dredging Material...[including] the $81,575.00 that the

[Corps] purported to deduct from the fixed price

of

the Contract for said item by [its

2009 unilateral contract] Modification (compl.

if

16). While the Corps contends LRV is

attempting to obtain a second bite at the apple, it was the Corps ' CO who in 2010

reopened the issue regarding calculation

of

the quantity

of

CLIN 3 actually performed

by LRV, finding the Corps previously

had

erred in calculating that quantity with respect

to the 2007 decision and 2009 unilateral contract amendment.

The CO

determined that a

quantity

of

4,638.5 [cubic yards] was inadvertently omitted in the total calculation and,

while the total amount dredged was stated previously (in the CO decision and contract

amendments) as 42,842.5, [t]he total amount dredged should be 47,481 [cubic yards].

The CO, therefore, clearly did not view the earlier CO decision as conclusive and binding

upon the parties with respect to the Corps' making

of

final payment under the contract.

The Corps is correct that, to be considered timely, an appeal from a CO s final

decision to this Board must be made within 90 days

of

receipt

of

the

CO s

decision.

41 U.S.C. 7104(a); Sach Sinha Assocs. Inc. ASBCA No. 46916, 95-1 BCA

if 27,499 at 137,042. However, a

CO s

decision is not

final

when such decision is

reconsidered. Zomord Co. ASBCA No. 59065, 14-1BCAif35,626 at 174,483. As

stated in

Johnson Controls Inc. ASBCA

No. 28340, 83-2

BCA

if 16,915 at 84,170,

[w]here the facts indicate that a [CO's] initial decision was not truly final or that the

decision is being reconsidered, the failure to appeal from the decision within the

prescribed time period will not defeat th[is]

Board s

jurisdiction and the contractor's

opportunity to be heard

on

the merits.

Accord Roscoe-Ajax Constr.

Co

v

United States

458 F.2d 55, 63-64 (Ct. Cl. 1972);Propulsion Controls Engineering ASBCA No. 53307,

01-2

BCA

if 31,494 at 155,508.

The CO s reconsideration

of

the 2007 CO decision here indicates the decision was

not truly final.

See Precision Piping Inc. v United States

230 Ct. Cl. 741, 743 (1982);

Roscoe-Ajax Constr.

458 F.2d at 63;

accord CP

o

Bozeman Inc.

ASBCA No. 58533,

13

BCA

if 35,452 at 173,854-55; Sach Sinha

95-1BCAif27,499

at 137,042. While

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there are no procedures set forth in the CDA for reconsideration

of

a decision, it

is

a well

established principle that an administrative agency may reconsider its own decisions.

United States

v

Sioux Tribe, 616 F.2d 485, 493 (Ct. Cl. 1980), cert. denied, 446 U.S.

952; accord Biddle

v

United States, 186 Ct. Cl. 87, 98-99 (1968). Administrative bodies

who perform judicial or quasi-judicial functions are not infallible and are deemed to have

the right to reconsider a prior decision absent existence

of

a statute or regulation to the

contrary. Biddle, 186 Ct. Cl. at 98-99. On the unusual facts of this appeal, we hold that,

in reconsidering (and correcting) the Corps' calculation of CLIN 3 quantities performed

by LRV, the CO demonstrated that the 2007 decision was not final and that the earlier

determination is not a bar to LRV obtaining review

of

the Corps' actions with respect to

final payment under the contract in these appeals. We, therefore, also deny the Corps'

motion to dismiss these appeals for lack

of

urisdiction based upon the CDA s 90-day

requirement for submitting an appeal to this Board seeking review of a final decision.

II. Cross-Motions for Summary Judgment

Board Rule 7(c) (formerly 5(b)) authorizes us to entertain and rule upon motions

for summary judgment. E.g., J W Creech, Inc., ASBCA Nos. 45317, 45454, 94-1 BCA

26,459 at 131,661. The standards set forth in

FED R CIV

P. 56 guide our resolution

of

such motions. Lear Siegler, Inc., ASBCA No. 30224, 86-3 BCA 19,155 at 96,794;

Allied Repair Service, Inc., ASBCA No. 26619, 8 2 - 1 B C A ~ 1 5 7 8 5 at 78,162-63.

Where both parties move for summary judgment, as here, we evaluate each motion upon

its own merits. McKay v United States, 199 F.3d 1376, 1380 (Fed. Cir. 1999); Mingus

Constructors, Inc. v United States,

812 F.2d 1387, 1390 (Fed. Cir. 1987). We will grant

a motion for summary judgment only when the pleadings, depositions, answers to

interrogatories, and admissions on file, together with affidavits,

if

any, show that there is

no genuine issue as to any material fact and the moving party is entitled to entry

of

judgment as a matter

of

law. The burden

of

demonstrating these elements is upon the

party who seeks summary judgment and the non-moving party is entitled to have all

reasonable inferences drawn in its favor.

Celotex Corp. v Catrett,

4 77 U.S. 317, 322-24

(1986); Elekta Instrument S.A.

v

0 UR. Scientific Int' , Inc., 214 F.3d 1302, 1306 (Fed.

Cir. 2000); Comptech Corp., ASBCA No. 55526, 08-2 BCA 33,982 at 168,082.

In its cross-motion for partial summary judgment on liability, LRV contends the

Corps incorrectly calculated the payment due it for performing contract work under the

terms

of

the parties' contract. According to LRV, under its fixed-price contract, it was

to receive $510,000.00 ($10.00 per cubic yard x a quantity of 51,000 cubic yards) for

CLIN 3, excavation and placement, and $801,020.00 ($33.10 per square foot x a quantity

of

24,200 square feet) for CLIN 6, steel sheet piling. Instead, the Corps calculated the

payment owed to LRV

as

$474,810 ($10.00 a cubic yard x a quantity

of

47,481 cubic

yards) for CLIN 3, excavation and placement, and $783,937 ($33.10 a square foot x a

quantity of 23,683.89 square feet) for CLIN 6, steel sheet piling. LRV asserts: the

quantities it actually performed for CLINs 3 and 6 varied by less than 15% from the

9


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quantities set forth in the contract; no adjustment was to be made under the VEQ clause

unless quantities varied by more than 15%; and the Corps' CO, therefore, acted

incorrectly in reducing contract quantities set forth for the CLINs and in applying the

VEQ clause with respect to final payment. (App. mot. at 7-18)

In its motion for summary judgment and opposition to

LRV s

cross-motion, the

Corps asserts: the parties' contract specified that it was based upon estimated quantities

for CLINs 3 and 6; the CO adjusted the estimated quantities set forth pursuant to FAR

52.243-4, CHANGES

AUG

1987), and the contract's payment provisions (specifying

payment for CLINs 3 and 6 was to be made for quantities actually performed) to reflect

actual quantities LRV performed since actual quantities were less than estimated; the

CO did not apply the contract's VEQ clause to CLINs 3 and 6 because the difference

between estimated and actual quantities was less than 15%; and, when one reads the

contract as a whole, the CO acted correctly pursuant to contract terms because LRV

is

not entitled to payment under the contract for units

of

CLINs 3 and 6 not performed.

(Gov't mot. at 16-19;

gov t

resp. at 5-7)

The parties, therefore, construe the terms

of

their contract differently and the issue

before us is the proper interpretation of the contract terms with respect to payment of the

unit-priced CLINs. The proper interpretation

of

a contract is a question

of

law, and

amenable to resolution by motions for summary judgment. Sevenson Environmental

Servs. Inc v Shaw Environmental Inc.

477 F.3d 1361, 1364 (Fed. Cir. 2007).

We interpret a contract in accordance with its express terms and begin with the

plain language

of

that agreement. E.g. C. Sanchez Son

Inc

v United States 6 F.3d

1539, 1543 (Fed. Cir. 1993);

Gould

Inc

v

United States

935 F.2d 1271, 1274 (Fed. Cir.

1991).

f

he provisions are clear and unambiguous, they must be given their plain and

ordinary meaning. E.g. United lnt l Investigative Servs. v United States 109 F.3d 734,

737 (Fed. Cir. 1997);

Alaska Lumber Pulp Co v Madigan

2 F.3d 389, 392 (Fed. Cir.

1993).

LRV argues the essential framework for final payment under the Contract is

established in the [VEQ] clause, which sets aside a 30 percent range (from 85 percent

of

the estimated quantity to 115 percent

of

the estimated quantity, a/k/a the

VEQ

Buffer') for payment of the fixed contract price. According to LRV, when actual

quantities fall within the VEQ Buffer, or when a CLIN is not unit-priced (i.e., lump-sum

payment item), the VEQ Clause provides

no

authority to adjust the fixed contract price

and the CO is prohibited from making such an adjustment due to lack

of

contractual

authority. (App. mot. at 7-8; app. reply hr. at 2-6)

Contrary to the assertion

ofLRV,

however, the plain language of the VEQ clause

(which is quoted above) does not set forth the framework for payment of CLINs under

the parties' contract. The VEQ clause, by its plain terms, simply sets forth a procedure

10


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for adjusting a contract's price with respect to unit-priced quantities differing from

contract quantity estimates by more than 15%. See Foley Co v United States

11

F.3d

1032 (Fed. Cir. 1993);

Victory Constr. Co v United States

510 F.2d 1379 (Ct. Cl.

1975). Under the VEQ clause, the parties are bound to the contract's unit prices within a

specific range (here 85% to 115%)

of

estimated quantities but,

if

the actual quantity

varies significantly (more than 15%) from the estimated quantity, a party may seek an

equitable adjustment in the contract price due solely to the variation in quantity above

115% or below 85% of the estimated quantity.

FAR

52.211-18; see Foley

11

F.3d at

1034;

Cosmo Constr.

Co

v United States

451F.2d602, 616-17 (Ct. Cl. 1971). As the

Court of Claims stated, the VEQ clause is the vehicle for adjusting, with a minimum

of

haggling, the compensation received by contractors who are called upon in the course

of

performance to do, within limits, more or less work than could be estimated.

United

Contractors v United States 368 F.2d 585, 601 (Ct. Cl. 1966).

When actual quantities cannot be accurately forecast for work to be performed,

unit pricing based on estimated quantities is used in construction contracts to evaluate

bids, determine an initial contract price, and provide an equitable method of pricing

actual quantities of the pay items. When such pricing is used in federal government

contracts, a VEQ clause

is

included in the contract to provide for the pricing

of

large

variations from estimated quantities. See FAR 11.702, 36.207, 52.211-18.

Here, there is no dispute that actual quantities for unit-priced CLINs 3 and 6

differed from estimated quantities for the CLINs by

less

than 15%. As a result, there is

no reason to reference the VEQ clause, which authorizes an equitable adjustment only if

actual quantities exceed estimated quantities by more than 15%, in order to determine

payment to LRV for unit-priced CLINs under the parties' contract.

Section 01270

of

the parties' contract ( Measurement and Payment ) sets forth the

framework for the payment of unit-priced CLINs. The plain language of

f

1.2.1.2

of

01270 expressly states with respect to CLIN 3 that [t]he total amount

of

material

removed, and to be paid for under the contract, will be measured by the cubic yard in

place and be determined by the average end area method. Further, the plain language

of

if

1.2.3.2 of 01270 expressly states with respect to CLIN 6 that (t]he amount paid for

will be the number of square feet of installed and painted sheet pile used in the accepted

work. The plain meaning of these words is that LRV is to be paid for the actual

amount

of

material removed under CLIN 3 and for actual sheet pile used in accepted

work under CLIN 6 See Lockheed Martin IR Imaging Sys. Inc.

v

West 108 F 3d 319,

322 (Fed. Cir. 1997) (words of a contract are deemed to have their ordinary meaning).

While LRV suggests actual quantities are to be used only with respect to progress

payments made to it ( app. mot. at 9-11, 16-18), it cites no contract language limiting the

use of actual CLIN quantities to progress payments made and mandating the use of

initial estimated quantities when it comes time for determining final payment to be

made under the contract. Accordingly,

LRV s

construction of the contract as requiring


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unit-priced CLINs be paid by multiplying the unit price by the estimated (rather than

actual) quantity

of

the CLINs

is

contrary to the express terms

of

contract 01270.

It is

well established that a contract is to be construed as a whole in a manner which

harmonizes all of its provisions. State o Arizona v United States 575 F.2d 855, 863 (Ct.

Cl. 1978); Laidlaw Environmental Servs. GS), Inc. ASBCA No. 45365, 93-3 BCA

if

26,128 at 129,884. A construction which gives reasonable meaning to all parts

of

an

instrument is preferred to one leaving a portion of the instrument useless, inexplicable,

insignificant, void, meaningless or superfluous.

Hof-Gar

Mfg.

Corp. v United States

351

F.2d 972, 979 (Ct. Cl. 1965); A.R. Mack Constr. Co. ASBCA No. 49526, 97-1 BCA

if

28,742 at 143,464. LRV s construction of the parties' contract would require us to

ignore the words

of

contract 01270 (measurement and payment) when it comes to final

payment under that contract contrary to the rules of contract interpretation.

LRV further asserts that there is no contract provision (other than the VEQ clause)

authorizing the CO to adjust the parties' contract to reflect a change in price based on

actual quantities

of

unit-priced CLINs, thereby precluding a contract interpretation

other than its own interpretation (app. mot. at 8, 11, 24; app. reply br. at 6-14). The

parties' contract, however, includes

FAR

52.243-4, Changes, which authorizes a CO to

make a deductive change in the contract price if an aspect of the contract work set forth

is

deemed unnecessary and not required to be performed.

See e.g. S.N. Nielsen Co. v

United States

141

Ct. Cl. 793, 795-95 (1958); CTA Inc. ASBCA No. 47062, 00-2 BCA

if

30,947 at 152,761-62.

Since the actual quantities of unit-priced CLINs 3 and 6 required were less than

the quantities estimated to be required for those CLINs, the Corps correctly made

an

appropriate downward adjustment

of

the quantities set forth in the contract schedule for

those CLINs. Nothing in the parties' contract barred the Corps' action here, which

comports with the contract's payment provisions read as a whole under established

contract construction principles.

Finally, LRV asserts that: the parties' contract is ambiguous with respect to final

payment; LRV s construction

of

the contract is reasonable ; and therefore we must

construe the contract against its drafter, the Corps (app. mot. at 19-26). A contract is

considered ambiguous, however, only if it

is

susceptible to more than one reasonable

interpretation.

E.g. Metric Constructors Inc. v NASA

169 F.3d 747,

751

(Fed. Cir.

1999). The contract here expressly provides in its schedule that quantities set forth for

unit-priced CLINs are estimated and in 01270 that actual quantities for unit-priced

CLINs will be used to determine payment of those CLINs. LRV s interpretation of the

parties' contract

as

requiring use

of

estimated quantities to determine payment

of

unit-priced CLINs requires disregard of several paragraphs of contract 01270 and is not

reasonable.

William

F.

Klingensmith Inc.

v

United States

505 F.2d 1257, 1262 (Ct. Cl.

197 4) (interpretation which requires complete disregard

of

entire paragraphs

of

contract

not normally considered reasonable). We conclude the contract's payment provisions are

12


13/13

susceptible to only one reasonable interpretation and thus do not constitute an ambiguity

that must be construed against the Corps.

See

e.g. C Sanchez Son 6 F 3d at 1544.

CONCLUSION

We deny the government s motion to dismiss the appeal for lack

o

urisdiction.

We also deny the appellant s motion for partial summary judgment with respect to

liability. We grant the government s motion for summary judgment. The appeals are

denied.

Dated: 14 July 2015

I concur

4

~

/

~ ~

dministrative Judge

Acting Chairman

Armed Services Board

o Contract Appeals

TERRENCE S HARTMAN

Administrative Judge


o Contract Appeals

I concur

RICHARD SHACKLEFORD

Administrative Judge

Vice Chairman


o Contract Appeals

I certify that the foregoing is a true copy

o

the Opinion and Decision o the

Armed Services Board o Contract Appeals in ASBCA Nos. 58727, 58728, Appeals

o

LRV Environmental, Inc., rendered in conformance with the Board s Charter.

Dated:

13

JEFFREY D. GARDIN

Recorder, Armed Services

Board o Contract Appeals

lrv environmental, inc., a.s.b.c.a. (2015)

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